THQ's quick sale blocked in response to creditors' complaints
Last week we brought news that THQ's hopeful quick sale to the equity firm Clearlake was in trouble, following objections raised by a US Trustee and the publisher's own creditors. Today, a US judge has upheld those objections, saying the proposed sale process hasn't given potential buyers enough time to make a bid.
The Clearlake sale was scheduled to complete this week, but US bankruptcy judge Mary F. Walrath has found in favour of the creditors, noting that the aggressive timetable had pushed out other interested parties. "I have problems concluding that the pre-petition sale process was fulsome," she said, finding problem with the way THQ "did not even put out to the public that it was for sale" until after Clearlake had signed a non-disclosure agreement over the deal.
Walrath cited 10 possible buyers that had contacted THQ following its bankruptcy, saying this was evidence that the publisher wasn't doing everything it could to maximise the sale price. She also queried THQ's desire to be sold wholesale, saying "individual titles may have substantial value," and adding that the requirement to purchase the company in its entirety "may depress bids." Despite these concerns, as yet no ruling has been made on whether this requirement will also be blocked.
On THQ's part, the company is claiming it wanted the quick sale to fund the $37.5 million bankruptcy loan it's looking to take out, which would need to be paid by the 15th January. The judge dismissed this, saying "I am not convinced that we are under the gun to have a sale process by the 15th."
The revised date for the sale of THQ has yet to be decided, although the creditors are looking for a three week extension to the process.